The IRS has provided employers with additional time to obtain the certification necessary to claim the Work Opportunity Tax Credit for 2014, which was retroactively extended by the Tax Increase Prevention Act of 2014 to cover eligible employees who began work before Jan. 1, 2015.
An employer that hired a member of a targeted group, or a tax-exempt organization that hired a qualified veteran, during 2014 will meet the requirements for the credit if a pre-screening notice to request certification is filed with the appropriate Designated Local Agency (DLA) no later than Apr. 30, 2015.
The Work Opportunity Tax Credit is available to virtually all private, for-profit employers who hire new employees from targeted groups. These groups include disabled or unemployed veterans, food stamp recipients, long-term recipients of state assistance, Supplemental Security Income recipients, ex-felons and more. Certain tax-exempt employers can receive the credit against payroll taxes for hiring qualified veterans, i.e., disabled, unemployed or food stamp recipients.
Generally the employer must complete two forms:
- IRS Form 8850 – Pre-Screening Notice and Certification Request for the Work Opportunity Credit
- Employment and Training Administration (ETA) Form 9061 – Individual Characteristics Form, Work Opportunity Tax Credit Applicant Information.
In Michigan, the Unemployment Insurance Agency is the Designated Local Agency. Submit the forms to the Designated Local Agency within 28 calendar days from the employee’s start date. As noted above, these forms can now be completed for applicable employees hired during 2014 and submitted on or before April 30, 2015.
Additional information can be found on the Michigan Department of Licensing and Regulatory Affairs website. Go to the Employment Security and Workplace Safety section, click on Unemployment Insurance Agency and then go to the Quick Link for Work Opportunity Tax Credit Program.